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AULDIN 16 <br /> & ENKINS <br /> Comments, Recommendations, ORANGE COUNTY <br /> and Other Issues (Continued) NORTH CAROLINA <br /> ■ New GASB Pronouncements for Future Years <br /> Statement No. 84, Fiduciary Activities, was issued in January 2017 and is effective for the first reporting period beginning after <br /> December 15, 2018. However, in light of the COVID-19 Pandemic, in May 2020 the GASB issued Statement No. 95 (Postponement of the <br /> Effective Dates of Certain Authoritative Guidance) which changed the effective date of Statement No. 84 to reporting periods beginning after <br /> December 15, 2019. <br /> Statement No. 87, Leases, was issued in June 2017 and is effective for the first reporting period beginning after December 15, 2019. <br /> However, in light of the COVID-19 Pandemic, in May 2020 the GASB issued Statement No. 95 (Postponement of the Effective Dates of Certain <br /> Authoritative Guidance) which extended the effective date of Statement No. 87 by eighteen months. This statement increases the usefulness <br /> of governments' financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as <br /> operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It <br /> establishes a single model for lease accounting based on the principle that a lease is the financing of the right to use an underlying asset. <br /> Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to <br /> recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about <br /> governments' leasing activities. <br /> Definition of a Lease: A lease is defined as a contract that conveys control of the right to use another entity's nonfinancial asset (the <br /> underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets <br /> include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, <br /> unless specifically excluded in this statement. <br /> 12 <br />